Odenwald introduces bill to cut county's tax rate by 2.25 cents
September 07, 2005 - By LAURA UHLMANSIEK
County taxpayers may see a reduction in the county tax rate for the first time in 16 years.
County Councilman Kurt Odenwald, R-Shrewsbury, introduced legislation last week to reduce the county tax rate to 55.75 cents per $100 of assessed valuation from 58 cents per $100.
Odenwald proposed that the 2.25-cent tax-rate cut be taken from the debt service fund, which could save taxpayers nearly $5 million.
"We have such a surplus in the debt service fund, we can continue to meet all of our obligations on our current bonds, continue to build a surplus, even with the tax reduction," Odenwald told the Call.
The County Council will conduct a public hearing on the proposed change to the 2005 tax rate at 6:30 p.m. today — Sept. 8 — in the County Council Chamber of the Administrative Building, 41 S. Central Ave., Clayton. The County Council must set the county's tax rate by Sept. 20.
In a letter to County Counselor Pat Redington, Odenwald said that because the total assessed valuation for all property in the county had increased to $20.86 billion this year from $18.37 billion last year, the county will receive more tax revenue than it had expected in the 2005 budget.
"Our 2005 budget was based upon revenue projections that have been exceeded due to the aggressive reassessment of property values," Odenwald stated in the letter. "County government should return some of that money back to the taxpayers."
The county's 58-cent tax rate, which has remained unchanged for 16 consecutive years, is comprised of several tax levies. The debt service tax levy is 8.5 cents per $100 of assessed valuation, general revenue is 19 cents, special road and bridge is 10.5 cents, health is 16.5 cents and park maintenance is 3.5 cents.
The debt service fund, which is used to redeem bonds and accumulated interest, is the only fund that would receive less revenue through the tax-rate cut, which Oden-wald said would not hurt the county's operations.
"Even with the tax cut, we're not affecting operating revenues, so we're able to take some of these increases and to continue to give our employees the raises that they de-serve, continue to fund the police department at a level which St. Louis County deserves, continue to have the level of park services that our county residents demand — we can cut the debt service fund and not miss a beat, and I think that's our obligation as county officials," Odenwald told the Call.
Jim Baker, the county's director of ad-ministration, told the Call that Odenwald's proposal will have a minimal impact on taxpayers and is inconsistent with the county's standard policy for the debt service fund.
"The general guideline, when we have a fund that we're buying bonds out of, we don't want the balance to go below the next year's payments," Baker said.
The county will have less of a safety net than normal for next year's payment if the proposal is approved. Baker said next year the county will have to pay about $14.5 million in debt service payments from the fund. The debt service fund has a balance of $7 million, he said, and more revenue will be coming in at the end of year, but he said the balance will be less than $14.5 million.
Baker said the debt service fund balance is less than normal because the debt service fund did not receive any tax revenue last year and a full tax rate would be needed to replenish the fund.
The county last year shifted the tax revenue from the different funds to account for stagnant county revenues. The debt service fund's 8.5-cent tax rate was allocated to the general fund to help cover costs.
However, the county still had to reduce funding for most county departments and programs and eliminate more than 100 full- and part-time county positions.
Baker said Odenwald's proposal contradicts the councilman's previous support of the county's general guidelines for bond funds.
"Ironically Councilman Odenwald sat on the committee with me to set the parameters with the baseball stadium with making a commitment and now his position is completely different," Baker told the Call. "What he agreed with the administration staff is a reasonable reserve in that account. He is now saying we don't need as much in the debt service fund."
Odenwald stated in his letter to Reding-ton that with the reduced rate, the debt service fund would still receive $15.77 million in tax revenue this year, which would cover the administration's debt service obligation for the year.
"I believe that St. Louis County can continue to meet its obligations for outstanding bonds with a reduced tax rate for the debt service fund, and at the same time continue to grow a surplus in the fund," Odenwald stated in his letter.
Odenwald told the Call that a majority of the council favors the legislation.
"I know that I have the support of at least four council members," Odenwald said.